December 1, 2015

Minutes of the Redevelopment Agency of Centerville City/Davis Center for the Performing Arts Administrative Control Board meeting held Tuesday, December 1, 2015 at 5:30 p.m. in the Centerville City Council Chambers, 250 North Main Street, Centerville, Utah.

John Marc Knight, ACB Board Member, Bountiful City Council (left at 6:26 p.m.)

Lawrence Wright, RDA of Centerville City, ACB Board Member

MEMBER ABSENT

John Pitt, ACB Board Member, Bountiful City Council

STAFF PRESENT

Steve Thacker, RDA Executive Director

Lisa Romney, Centerville City Attorney

Jacob Smith, Management Assistant

Jansen Davis, CPT Executive Director

Katie Rust, Recording Secretary

STAFF ABSENT

Blaine Lutz, Centerville Finance Director

MINUTES REVIEW AND ACCEPTANCE

The minutes of the October 20, 2015 RDA/ACB meeting were reviewed. ACB Board member Knight made a motion to approve the minutes. Vice Chair Higginson seconded the motion, which passed by unanimous combined vote of the RDA and ACB (7-0).

AMENDMENTS TO OPERATING LEASE

In their April 2015 meeting, the RDA/ACB directed staff to prepare amendments to the Lease Agreement to accomplish the following: 1) create a Capital Projects Reserve Fund (CRF); and 2) change the due date for the annual audited financial statements from 120 days to 150 days following close of the CenterPoint Theatre (CPT) fiscal year. The need for a CRF became apparent at the end of 2014 when CPT management expressed a desire to use some of the donated funds to construct a partition at the west end of the mezzanine. As a temporary solution, CPT was allowed to deposit those funds into the Maintenance Reserve Fund (MRF) for later use in 2015, but the RDA/ACB agreed in April 2015 that it would be appropriate to create a third reserve fund – in addition to the MRF and ORF (Operations Reserve Fund) – to hold funds designated for specific capital projects. Steve Thacker, RDA Executive Director, explained that regular monthly rent will continue to go to the Theater Reserve Fund (TRF), controlled by the RDA. The Operating Lease amendment would allow CPT to place surplus revenues in the CRF instead of becoming variable rent after caps in the MRF and ORF are reached, to save for capital projects and enable projects to take place across fiscal years. Chair Cutler and ACB Board member Knight both commented they suspect CPT will not be at the variable rent stage for quite some time. Jan Davis, CPT Executive Director, stated that, although the CRF would be controlled by CPT, the CPT Board has a desire to work with the RDA/ACB on individual projects. Director Wright expressed a desire for a clear separation between the 501(c)(3) (CPT) and the owner of the property (the City). He said he feels strongly that the property owner should make the decisions regarding physical capital improvements. Mr. Davis clarified that CPT would propose a capital improvement to the RDA; if the RDA does not agree to the improvement, CPT would need to revise its proposal. ACB Board member Knight said he does not have any concern with creation of the CRF, considering all decisions are made by the RDA/ACB. Director Fillmore commented that, if CPT is making enough revenue to save money toward building improvements, the City benefits as the building owner. Director Wright said he feels there must be a separation between government and the 501(c)(3), and this would take away the separation. Vice Chair Higginson responded that RDA/ACB approval is still required for capital projects.

Lisa Romney, Centerville City Attorney, explained that CPT would like to have five months after close of their fiscal year to submit the audited financial statements rather than the current four months. Director Wright asked what would happen to the funds if CPT were to leave the Center for the Performing Arts. Mayor Cutler stated that CPT has no plan to leave the Performing Arts Center, but it would be worth looking into.

ACB Board member Knight made a motion for the ACB to recommend RDA approval of Amendment No. 8 to the Lease and Operating Agreement for the Davis Center for the Performing Arts. ACB Secretary Averett seconded the motion, which passed by unanimous vote of the ACB (5-0).

RDA Director Wright made a motion to approve Amendment No. 8 to the Lease and Operating Agreement for the Davis Center for the Performing Arts, with the stipulation that staff look into what would happen to the funds in the unlikely event that the Lease is terminated. RDA Director Ivie seconded the motion, which passed by unanimous of the RDA (6-0).

2016 BUDGET FOR CENTERPOINT THEATRE

The Lease and Operating Agreement between the RDA and CPT requires CPT to submit an annual budget for the next year to the RDA/ACB for review and comment. The Lease Agreement specifically requires approval from the RDA/ACB of the facilities maintenance portion of that budget. Mr. Thacker reported that he met with Mr. Davis to review the proposed budget, and he recommends approval of the 2016 Facilities Maintenance Budget by the RDA. Mr. Davis presented the CPT 2016 Budget compared to the 2015 Budget, and answered questions from the RDA/ACB. Director Wright asked if it would be possible for CPT to provide a free production to Centerville and Bountiful citizens to give the opportunity to those who cannot usually afford to attend. Mr. Davis responded it is an interesting idea that he will take back to the CPT Board. ACB Board member Knight made a motion to return to discussion of the Budget, which was seconded by ACB Secretary Averett. ACB Board member Knight later withdrew his motion. Mr. Davis discussed facility rentals with the RDA/ACB, and explained specific Budget projections.

Mr. Davis stated that the biggest change in the 2016 Facilities Maintenance Budget is the addition of the HVAC contract. Mr. Thacker expressed the hope that once the HVAC maintenance contract is in place and the system is working efficiently the HVAC costs will reduce. Director Wright made a joint motion of the RDA/ACB to approve the 2016 Facilities Maintenance Budget and acknowledge the overall 2016 Budget, and to ask that CPT consider offering a free production for non-ticket holders in the community. Vice Chair Higginson seconded the joint motion, which passed by unanimous combined vote of the RDA/ACB (7-0).

With the conclusion of ACB business, ACB Board member Knight left the meeting at 6:26 p.m.

RDA BUSINESS – STATUS OF DEBT SERVICE

Mr. Thacker presented outstanding debt data for the last ten fiscal years by type. It is projected that the Performing Arts Center bond will be completely paid off by 2021. The Parrish Lane Gateway RDA Project Area will also end in 2021. Chair Cutler mentioned the possibility of setting up a revolving loan fund that would essentially extend some of the RDA capabilities in the area. Director Fillmore said she feels it would be prudent to save funds for betterment costs when the overpass is redone. Director Wright said he feels the RDA needs to be smart and not spend the principal so that revenue is generated. Director Fillmore requested a report from staff regarding expiration of the Project Area and what can be done with the funds. Mr. Thacker explained the opportunity utilized by the City when Freedom Hills Park was initiated to keep a portion of the “haircut” tax dollars that would otherwise have returned to taxing entities, as reimbursement for the costs of constructing that park. Those “haircut” revenues are now being used to pay a portion of the City’s annual UTOPIA pledge. The RDA discussed aspects of the planned Fire District property tax.

ADJOURNMENT

At 6:48 p.m. Director Wright made a motion to adjourn the meeting. Chair Cutler seconded the motion, which passed by unanimous vote (6-0).